Multiple Choice
Alpha Inc.'s beta is 1.2, the risk-free rate is 10 percent, and the market risk premium is 5 percent. Which of the following is Alpha's cost of retained earnings using the capital asset pricing model (CAPM) approach?
A) 8 percent
B) 10 percent
C) 12 percent
D) 14 percent
E) 16 percent
Correct Answer:
Verified
Correct Answer:
Verified
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